Are Pay Day Loans Worth It?
Thursday, April 14, 2011 at 5:56PM *JAPAN RELIEF UPDATE* We have reached about a little less than $100 to be donated to the Salvation Army's Japan Relief Efforts. I'm really pumped for those that have contributed and will probably be ending the drive this weekend. So there's still time (use that DONATE button) and I know we fell a little short of the $5000 but I know that every bit helps :)
Even though the economy is on the up-and-up it’s still really tough for a lot of people and small businesses to get credit or even just some wiggle room in their operating credit. There is an option that gets a ton of negative light that can be a very valuable tool – when understood and used responsibly. What I’m talking about are pay day loans. Now before you start thinking of pawn shops littering the by-ways in places like Las Vegas or even where you are from let’s really get into what a pay day loan really is.
First off, it is a designed to be a very short term loan. Ideally to fill a cash need that comes up before your next paycheck – hence the name. There are fees associated with it and they can be tricky if you aren’t dealing with a reputable source. You should expect to pay a premium here as you are being provided funds with a lot less of a back ground check and virtually instantly. This can be an expensive way to borrow but if you can’t qualify and need to borrow in a hurry the premium might be worth it. Different institutions have different application processes and repayment requirements so it’s very important to find one that you are most comfortable with and can honor your agreements with. Again if you are coming out of a bankruptcy, bad credit, starting a small business from scratch and need immediate funds and have exhausted all other options – then pay day loans can be a positive alternative.
Some negatives. A lot of places are borderline scams and prey on people’s fears and needs. There are companies and institutions that have a ton of small print in their agreements that are designed so that the borrower is doomed to fail and end up in default. There are some fee structures that are almost impossible to honor where the premium to borrow can be up to 80% of the loan amount. Companies sell the benefits of having easy money or how easy it is to collateralize with them. If you are putting up collateral, as some pawn shops do, you have to know that not only are you getting a mere fraction of its worth forwarded to you but you will have to pay fees on top of it to get your property back. In the event of default not only will the keep and resell property but some provisions may allow them to chase you for the fees that are owed.
I’ve done a bit of research and can refer a reputable company that deals in pay day loans. The website is http://www.mypaydayloan.com and they have one of the most open and upfront policies I have ever seen. There are limits on what you can borrow – which is a positive thing, as well as actually structuring these pay day loans as proper borrowing instruments. They have a decent re-structuring process in the event your repayment funds take a little longer than expected to get in. Their fees are straightforward and consistent as well as having incentives for you to join their membership ranks if you are a positive and steady borrower. This site/service has a great FAQ and even a pretty funny YouTube video that explains what they do. As far as a user experience goes the website is pretty clean and easy to use.
My final thoughts - If you are thinking about a pay day loan do your homework! Know that there will be a premium as you are getting access to funds quickly and easily. Be responsible and I would implore you to make sure you have your repayment provisions in order even before you engage. If you need a bridge between your next influx of capital and you want to stay under the radar then this might be right for you. Using a place like mypaydayloan.com can help you cover the things you need to in a safe and secure way.
Reader Comments (13)
Payday loans are really very convenient and are approved quickly. You will only need to log onto the Internet, place a lender, provide some basic information like proof of employment, your monthly earnings, proof you are over 18 years old and your active bank account information. Upon approval, the money is easily transferred to your bank account and you are done.
Payday loans are really very convenient and are approved quickly. You will only need to log onto the Internet, place a lender, provide some basic information like proof of employment, your monthly earnings, proof you are over 18 years old and your active bank account information. Upon approval, the money is easily transferred to your bank account and you are done. Payday Loans 24/7
The most significant observation can be seen in the popularity of online payday loans which are generally provided by online lenders. In fact such is the popularity of the online payday loans that most people suffering from ongoing financial crisis look up to them as their ultimate resort not realising the price they have to pay for it later.Loans for people with bad credit
It is really an advantage if you are availing for and if you are into some cash problem, then Payday loans can be sure to give cash that you need in an instant way.
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Payday loans are often very useful and can benefit from the Americans, who are able to provide financial difficulties at the time. Many states Lawsuit Loan prevent the number of roll-over, the people who are admitted on a payday loan, so that the guard of Americans do not understand the cycle of debt. Many lenders will want to provide customers with a rewarding and useful for the loans, the best prices they can.
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Payday loans online are for short-term borrowing and not meant to cover financing high-end items. So are they worth it? Well, it truly depends. If the borrower uses the loan responsibly, he can benefit from it.
Payday loans offer the easiest and the most convenient way to have extra cash for emergency purposes. However, people must still learn how to handle money wisely so that the loan won't be the first step to a debt spiral. Financial advisor perth
The most significant observation can be seen in the popularity of online payday loans which are generally provided by online lenders. Flat pack kitchens
Payday loans have high interest rate right? Many people do not recommend applying for a payday loan because of the high interest rates then the amount can be borrowed doesn't correspond to the interest rate added.
I think if resources are limited you have to evaluate all your options. While they aren't ideal for all situations they can be a resource. You always have to understand what you are signing as well. Thanks for the comment!
This is certainly one of the most valuable posts. Great tips from beginning till end. Lots of suggestions for me and for people. Superb work.
Payday loans are an absolute disgrace!
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When using payday loans, as Nunzio says, it's all about being sure that you have the provisions to pay it back BEFORE you borrow. It's no good borrowing money and then hoping that before the end of the month you're going to have some sort of windfall.
As long as you don't borrow outside of your means, know that you will have the money to pay it back within 2-4 weeks and fully understand your t&c's you should be absolutely fine. After my car broke down I used a payday loan service and had no trouble whatsoever. I think I would probably use one again if I needed to.